By Guest Columnist MICHAEL STOKKE, Atlanta office managing partner for Grant Thornton LLP
I often have the opportunity to speak with Atlanta CEOs on timely topics and have been surprised to find that the recent recurring theme of achieving sustainable growth is consistent among business leaders. CEOs who operate in varying environments are aligned on challenges and approaches to effective growth management.
Below are a few of the most salient insights they have shared.
Sustainable Growth Requires an Aligned Internal Growth System
Whether a firm is growing organically or by acquisition, it needs to embrace a strategy for sustainable, managed growth. The goal should be to build a system that aligns and drives behaviors that drive financial results, and optimizes technologies and business processes, without disrupting those processes or de-motivating employees.
It’s also important to balance growth and operational efficiency. Business leaders need to determine a reasonable growth rate and manage people, processes and technologies in a rational manner so they don’t overload and underperform. This typically requires setting up the system and ensuring it operates correctly before making a big growth push.
ROI Does Not Have To Be an Innovation Killer
A key question CEOs must address is how to satisfy both the business imperative to deliver returns with the growth benefits of an entrepreneurial, experimental culture. Price/earnings to Growth (PEG) focus is driving corporate culture and decision making from being highly decentralized to centralized.
Analysts want guarantees, and don’t like surprises. They don’t treat failures as learning opportunities. CEOs tend to want to guarantee success, which leads to a cautionary mindset. All of these dynamics can hinder innovation.
One suggestion for balancing the need for shareholder value with the desire for a growth culture is to create a process to do growth experiments quickly and cheaply that do not require elaborate business plans or financial projections. Companies should plan for and foster the innovation, experimentation and risk tolerance that drives long-term growth.
Another intriguing question is whether sustainable growth requires flat periods to allow the company to catch its breath and focus on regenerative activity, such as employee development, optimizing processes, R&D, technology enhancements and paying down debt.
The consensus among the CEOs is that both growth walls and plateaus exist, and they happen most often when a company grows too quickly. It is important to plan for these lulls and to have a strategy for leveraging them to re-energize and refocus the company, and to move rationally back into growth mode.
Foster a Culture of Performance and Mutual Accountability from the Top Down
I am particularly impressed by the honesty and thoughtfulness of these CEOs when asked to share their personal views on what business leaders should do to create a growth culture. I found this list of recommendations very encouraging.
- Embrace diversity and encourage different opinions
- Identify and understand the competencies of your team; and especially, the attributes of your key players
- Develop an attitude of constructive dissatisfaction; to fight complacency and promote new thinking
- Practice humility; be of service to customers and employees
- Have the courage to ask and answer tough conversations
- Promote critical thinking and inquiry
- Work to create meaning and purpose beyond revenue and profit
- Eliminate a culture of fear; give permission to speak freely; teach vs. punish
- Embrace adaptive learning; “Stay curious, my friend”
- Hire slowly
- Build and revere trust
The sober truth is that there is no universal, one-size-fits-all approach to creating a growth culture. It is reassuring to know that Atlanta business leaders are passionate about managing growth and innovation from both a systems and process perspective and that they are open to sharing their unique, personal perspectives to illuminate ideas that can benefit any business.